Litecoin Scheduled for Halving Next Year, Rising Despite FTX Crisis

Attracting Attention by Addressing Bitcoin's Weaknesses... Up 30% Compared to 3 Months Ago
Potential Positive Factor as It May Be Used for Google Cloud Service Payments Next Year

[Asia Economy Reporter Lee Jung-yoon] Despite several adverse factors such as interest rate hikes and the bankruptcy of the global cryptocurrency exchange FTX, the price of Litecoin is on an upward trend. With the halving event scheduled for next year, which will reduce mining rewards by half, investors are attracted by the expected price increase due to the reduced issuance volume.

According to the global cryptocurrency market tracking site CoinMarketCap, as of 3:06 PM on the 14th, the price of Litecoin was recorded at $78.20 (approximately 101,324 KRW), up 1.97% from the previous day. Compared to three months ago, it has risen by more than 30%.

Litecoin rose to $71.71 on the 7th of last month when the FTX crisis began, then dropped to $50.65 on the 10th, but has since shown a recovery trend. On the 5th of this month, it surged to $83.59, the highest level since May this year.

The main reason for Litecoin’s price increase is the halving event scheduled for next year. Litecoin’s origin is Bitcoin, a representative cryptocurrency. Litecoin was created as a hard fork branching off from the existing blockchain of Bitcoin, operating as a mainnet blockchain project derived from Bitcoin. The cryptocurrency used on the Litecoin mainnet is also called Litecoin. As a result of the hard fork from Bitcoin, Litecoin is issued through a proof-of-work (PoW) mining method, and it has a halving event that reduces mining rewards by half. When mining rewards decrease, the issuance volume naturally declines, leading to a price increase.

According to CoinGecko data, Litecoin’s halving is scheduled for next year. Currently, Litecoin miners receive 12.5 coins as a reward for generating one block, a unit of data storage, but after the halving, this will decrease to 6.25 coins. The total issuance of Litecoin is capped at 84 million coins, and the halving occurs approximately once every four years.

In addition to the halving, news that more than ten coins, including Litecoin, could be used to pay for Google Cloud service fees starting next year has also acted as a positive factor.

Beyond these positive factors, Litecoin has gained market attention by addressing Bitcoin’s weaknesses. Bitcoin has been criticized for its slow transaction speed because it records all transactions within the blockchain. In contrast, the Litecoin blockchain does not store every transaction. It uses an off-chain method where transactions are processed outside the blockchain, and only the results are recorded on-chain, improving speed. This enhanced transaction speed has ultimately provided advantages for peer-to-peer (P2P) transactions.

The cryptocurrency research platform Xangle explained, "Litecoin is a project born based on a copy of Bitcoin’s source code, and while Bitcoin is often compared to gold, Litecoin is likened to silver. Litecoin focuses on improving speed and accessibility, so its block generation and total token issuance are each four times faster and larger than Bitcoin’s, but it also shares many technical similarities."

However, trading Litecoin is not possible on domestic exchanges operating Korean won markets. Although it was previously listed, it was delisted in June this year. According to the Act on Reporting and Using Specified Financial Transaction Information, domestic cryptocurrency businesses must prevent money laundering and financing of terrorism, check transaction records, and take appropriate measures if anonymous transfer technologies are detected. In this context, the Litecoin Foundation implemented an upgrade called MimbleWimble, which includes an optional feature that hides transaction information, and as a result, it is known that Litecoin was delisted.

This content was produced with the assistance of AI translation services.